Description
PROJECT ON SKIN CARE INDUSTRY IN INDIA
SKINCARE INDUSTRY IN INDIA
DOA NAQVI MBA-Sem.III
INTRODUCTION
? Products which have a quick turnover, and relatively low cost are known as Fast Moving Consumer Goods (FMCG). ? FMCG products are those that get replaced within a year. ? Its principal constituents are Household Care, Personal Care and Food & Beverages. ? India?s FMCG sector is the fourth largest sector in the economy.
SEGMENT-WISE BREAK UP OF THE FMCG SECTOR IN INDIA
SEGMENT PRODUCTS
HOUSEHOLD CARE
MAJOR PLAYER
HUL,Nirma,Godrej Consumer products,ITC,P&G,Dabur Reckett & Coleman.
Fabric wash; household cleaners (dish/utensil cleaners,floor cleaners,air fresheners,insecticides and mosquito repellents,metal polish and furniture polish). Oral care, Hair care,Skin care,Personal wash (soaps),cosmetics & toiletries,deodorants,perf umes, female hygiene products.
PERSONAL CARE
Colgate Palmolive,HUL, Amway,L?Oreal,Lakme,M arico,Cavin Care,Fem Care,Emami,P&G,Himal aya,ITC, Godrej Consumer products.
SEGMENT
PRODUCTS
FOOD : Staples, cereals, bakery products (biscuits, breads, cakes, snack foods, chocolates, icecreams, branded flour, branded rice, ready-to-eat packaged foods etc. BEVERAGE : Health beverages,Tea,Coffee,Bottled Water,Juices,Liquor etc.
MAJOR PLAYERS
Parle Agro, Brittania, Nestle, Cadbury, Pepsi Co., CocaCola etc.
FOOD &BEVERAGES
United Breweries,GlaxoSmith Kline,PEPSICO,Coca Cola,Radico,Dabur,Real etc
INDIAN MARKET FOR PERSONAL CARE PRODUCTS
PROJECTED GROWTH
?
Subject to sustained overall GDP growth rates of ~8-9% p.a., the overall Indian personal care market has the potential to grow at 15%-16% p.a. (much higher rates for select segments like colour cosmetics, skin care and deodorants) and thereby double to ~$8-bn by 2012-13.
SKIN CARE INDUSTRY OF INDIA
?
?
The skin care market belongs to the Personal Care segment of the FMCG sector in India and is valued at $180 million in India (Approx. Rs.72,000 Cr.) With safe and effective procedures, advancement in medical technology, increase in awareness, the Indian Skin care solutions business is growing very fast.
?
?
The skin care market can be segregated into toners, cleansers, sunscreens, antiwrinkle creams, dark circle removing creams, astringents, facial creams, moisturizers, fairness creams, day and night creams, etc. NEED SATISTACTION : - Personal hygiene - Soft & Smooth skin - (to look beautiful)
?
?
?
The skin care market is at a primary stage in India. The penetration level for the rural market is relatively low. However, within a period of five-six years, the use of skin care products has increased significantly in India. New players such as Avon and Oriflame have entered the market with the natural ingredient benefit platform, which could further spur growth.
REASONS FOR GROWTH IN THE SKIN CARE INDUSTRY IN INDIA
?
?
? ?
?
Concerns about hygiene and personal grooming drive sales. Discounts boost growth in the face of economic uncertainty. Domestic players expand their presence. Chained retailers create opportunities for point-of-sale marketing. Rising affluence and sophistication to drive future growth.
VALUE CHAIN ANALYSIS
INBOUND LOGISTICS
?
?
?
Indian skin care industry typically uses specialty chemicals, such as surfactants, fragrance compounds, polymer compounds and UV filters as active ingredients. Specialty chemical manufacturers supplying to skin care are adopting „green chemistry? principles to better meet consumer demand for natural and safer products and increasingly stringent regulatory requirements. Advances in the area of nanotechnology are helping researchers create breakthroughs in biotechnology.
OPERATIONS
?
?
?
High R&D expenditure and a large no. of innovations (“green” chemistry) by the Indian skin care product formulation companies. Some companies are now backwardly integrated in the skin care ingredients space. The recent market developments and changed competitive landscape with the advent of large corporations have contributed to changing the scenario.
OUTBOUND LOGISTICS
?
?
? ? ?
Large scale retail establishments- Department stores (Big Bazaar, Visual Mega Mart, Reliance Retail stores.) Supermarkets or self service stores-Large scale retail shops operating at lower costs, selling at lower price. (HyperCITY, ApnaBazar, Spencer's, Subhiksha.) Convenience stores or General stores or Variety stores. Multiple Shops or chain stores. Specialized stores- These are the shops that deal in only one or two special types of goods. Shoppers' Stop & Globus.
MARKETING/AFTER SALES SERVICES
?
?
Advertising is done through print, electronic & television media. No after sales services as such(money-back offer available for certain product brands)
FIVE FORCE MODEL
BARRIERS TO ENTRY
?
?
Low import duty has enabled many international brands to enter into the domestic market. Competition amongst domestic players to enter the rural market. (Distribution networks being beefed up)
BARGAINING POWER OF SUPPLIERS
?
?
Some of the companies are integrated backwards, which reduces the supplier's importance. Manufacturing is largely outsourced due to globalization, the skin care product distributors in the developing countries are struggling to capture and retain their market share from the multinational companies.
BARGAINING POWER OF BUYERS
?
In case of branded products, there is little that the consumer can influence, but intense competition within the skin care companies results in value for money deals for consumers -(e.g. buy one, get one free concept).
RIVALRY BETWEEN EXISTING FIRMS
?
?
?
?
Competition is faced from both domestic, MNCs and also from cheaper imports, which are increasingly visible in urban markets. Price wars are a common phenomenon. Highly scattered market and poor transport infrastructure limits the ability of MNCs and national players to reach out to remote rural areas and small towns. Low brand awareness enables local players to market their spurious look-alike brands.
PRESSURE FROM SUBSTITUTE PRODUCTS
?
The best part in skincare sector is that the substitutes here are found within the sector itself so if the customers change their consumption pattern then too the effect will be on the company but the whole sector remains unaffected.
CONSUMER PERSPECTIVE
?
With rising education levels and increased brand promotion by the personal care manufacturers, the aspirations of the younger generation have been turning to the branded personal care products. Brand awareness is extremely high in the urban markets but brand loyalty is very low. In rural markets, the opposite is true. Smaller product packs to attract the consumers (those who are open to experiments and those who have lower buying capacity).
?
?
MARKET PLAYER’S PERSPECTIVE
?
?
?
Pricing, brand equity and distribution network are the key differentiating factors in the skin care market. India, being a big country, has different demands from different regions. Price wars are forcing many players to offer discounts and this has reached a stage today where some companies are launching new products with discounts.
MAJOR PLAYERS OF THE SKIN CARE INDUSTRY OF INDIA
MARKET SHARE (%) OF SKIN CARE COMPANIES
(Basis retail value rsp. ’09)
21.8%
3.9%
3.4%
2.5 %
Cavin Care
HUL
53.0%
3.4% 12.0%
Hindustan Unilever Godrej Revlon Others
CavinKare Emami L'Oreal
HINDUSTAN UNILEVER Ltd.
?
Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods Company, with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages. The company?s Turnover is Rs. 17,523 crores (for the financial year 2009 - 2010).
?
Major skin care products are: > Fair and Lovely, Lakme, Pond?s and Vaseline > Breeze, Dove, Hamam, Lifebuoy, Liril, Lux, Rexona and Pears.
?
CAVINKARE LTD.
?
In 1983 with a single product, CavinKare started out as a small partnership firm. The Company that began its journey as Chik India Ltd was renamed as CavinKare Pvt. Ltd (CKPL) in 1998. Smart marketing and clear product positioning not only ensured CavinKare's growth but also helped the company broaden its product portfolio extensively.
?
Major skin care products> Fairever, Fairever Fruit, Spinz Talc, Spinz Deodrants,Hi5 Deodrant and Nyle Cold Cream and Lotion.
?
GODREJ CONSUMER PRODUCTS
Godrej Consumer Products (GCPL) is a leader among India's Fast Moving Consumer Goods companies, with Personal and Home Care Products. ? GCPL is driven by the mission to continuously enhance the quality of life of consumers in highgrowth markets with its products. ? Major skin care products are : > Fair Glow, Cinthol (soaps, deodorants and talcum powder),Vigil & Godrej No.1.
?
EMAMI LIMITED
Emami Limited is a coveted Rs 1000 crore business entity, a leading player in the personal and healthcare consumer products industry in India engaged in manufacturing and marketing of health, beauty and personal care products that are based entirely on ayurvedic formulation. ? Major skin care products of the company are as follows : > Boroplus antiseptic cream, Boroplus prickly heat powder, Fair & Handsome, Malai Kesar Cold Cream & Navratna cool talc.
?
SWOT ANALYSIS
?
?
Strengths 1. Low operational cost. 2. Presence of established distribution network in urban as well as rural areas. 3. Presence of well known brands. Weakness 1. Low exports level. 2. „Me-too? products which legally mimic the labels of established brands narrow down the scope of skin care products in rural & semiurban market.
SWOT ANALYSIS cont.
?
?
Opportunities 1. Untapped rural market. 2. Rising income level of consumers. 3. Large domestic market- 1 billion population 4. Export potential. Threats 1. Removal of import restrictions resulting in replacing of domestic brands. 2. Slowdown in rural demand. 3. Tax & regulatory structure.
CONCLUSION
? ?
?
?
?
Multinational players with international brands have a strong presence in the Indian personal care segment. Local brands too are gaining a foot-holding the market by innovatively developing value offerings to meet the unique needs of the Indian consumer. Going ahead, it will be important to develop R&D capabilities to further customize products for Indian consumers, create greater awareness among the burgeoning middle class and ensure effective distribution reach to service them. The companies that are able to develop a judicious mix of the above will be the eventual winners. The time is ripe to review one?s strategy and come up with innovative approaches to help realize the full potential of the Indian skin care sector.
Thank you!
doc_460523359.ppt
PROJECT ON SKIN CARE INDUSTRY IN INDIA
SKINCARE INDUSTRY IN INDIA
DOA NAQVI MBA-Sem.III
INTRODUCTION
? Products which have a quick turnover, and relatively low cost are known as Fast Moving Consumer Goods (FMCG). ? FMCG products are those that get replaced within a year. ? Its principal constituents are Household Care, Personal Care and Food & Beverages. ? India?s FMCG sector is the fourth largest sector in the economy.
SEGMENT-WISE BREAK UP OF THE FMCG SECTOR IN INDIA
SEGMENT PRODUCTS
HOUSEHOLD CARE
MAJOR PLAYER
HUL,Nirma,Godrej Consumer products,ITC,P&G,Dabur Reckett & Coleman.
Fabric wash; household cleaners (dish/utensil cleaners,floor cleaners,air fresheners,insecticides and mosquito repellents,metal polish and furniture polish). Oral care, Hair care,Skin care,Personal wash (soaps),cosmetics & toiletries,deodorants,perf umes, female hygiene products.
PERSONAL CARE
Colgate Palmolive,HUL, Amway,L?Oreal,Lakme,M arico,Cavin Care,Fem Care,Emami,P&G,Himal aya,ITC, Godrej Consumer products.
SEGMENT
PRODUCTS
FOOD : Staples, cereals, bakery products (biscuits, breads, cakes, snack foods, chocolates, icecreams, branded flour, branded rice, ready-to-eat packaged foods etc. BEVERAGE : Health beverages,Tea,Coffee,Bottled Water,Juices,Liquor etc.
MAJOR PLAYERS
Parle Agro, Brittania, Nestle, Cadbury, Pepsi Co., CocaCola etc.
FOOD &BEVERAGES
United Breweries,GlaxoSmith Kline,PEPSICO,Coca Cola,Radico,Dabur,Real etc
INDIAN MARKET FOR PERSONAL CARE PRODUCTS
PROJECTED GROWTH
?
Subject to sustained overall GDP growth rates of ~8-9% p.a., the overall Indian personal care market has the potential to grow at 15%-16% p.a. (much higher rates for select segments like colour cosmetics, skin care and deodorants) and thereby double to ~$8-bn by 2012-13.
SKIN CARE INDUSTRY OF INDIA
?
?
The skin care market belongs to the Personal Care segment of the FMCG sector in India and is valued at $180 million in India (Approx. Rs.72,000 Cr.) With safe and effective procedures, advancement in medical technology, increase in awareness, the Indian Skin care solutions business is growing very fast.
?
?
The skin care market can be segregated into toners, cleansers, sunscreens, antiwrinkle creams, dark circle removing creams, astringents, facial creams, moisturizers, fairness creams, day and night creams, etc. NEED SATISTACTION : - Personal hygiene - Soft & Smooth skin - (to look beautiful)
?
?
?
The skin care market is at a primary stage in India. The penetration level for the rural market is relatively low. However, within a period of five-six years, the use of skin care products has increased significantly in India. New players such as Avon and Oriflame have entered the market with the natural ingredient benefit platform, which could further spur growth.
REASONS FOR GROWTH IN THE SKIN CARE INDUSTRY IN INDIA
?
?
? ?
?
Concerns about hygiene and personal grooming drive sales. Discounts boost growth in the face of economic uncertainty. Domestic players expand their presence. Chained retailers create opportunities for point-of-sale marketing. Rising affluence and sophistication to drive future growth.
VALUE CHAIN ANALYSIS
INBOUND LOGISTICS
?
?
?
Indian skin care industry typically uses specialty chemicals, such as surfactants, fragrance compounds, polymer compounds and UV filters as active ingredients. Specialty chemical manufacturers supplying to skin care are adopting „green chemistry? principles to better meet consumer demand for natural and safer products and increasingly stringent regulatory requirements. Advances in the area of nanotechnology are helping researchers create breakthroughs in biotechnology.
OPERATIONS
?
?
?
High R&D expenditure and a large no. of innovations (“green” chemistry) by the Indian skin care product formulation companies. Some companies are now backwardly integrated in the skin care ingredients space. The recent market developments and changed competitive landscape with the advent of large corporations have contributed to changing the scenario.
OUTBOUND LOGISTICS
?
?
? ? ?
Large scale retail establishments- Department stores (Big Bazaar, Visual Mega Mart, Reliance Retail stores.) Supermarkets or self service stores-Large scale retail shops operating at lower costs, selling at lower price. (HyperCITY, ApnaBazar, Spencer's, Subhiksha.) Convenience stores or General stores or Variety stores. Multiple Shops or chain stores. Specialized stores- These are the shops that deal in only one or two special types of goods. Shoppers' Stop & Globus.
MARKETING/AFTER SALES SERVICES
?
?
Advertising is done through print, electronic & television media. No after sales services as such(money-back offer available for certain product brands)
FIVE FORCE MODEL
BARRIERS TO ENTRY
?
?
Low import duty has enabled many international brands to enter into the domestic market. Competition amongst domestic players to enter the rural market. (Distribution networks being beefed up)
BARGAINING POWER OF SUPPLIERS
?
?
Some of the companies are integrated backwards, which reduces the supplier's importance. Manufacturing is largely outsourced due to globalization, the skin care product distributors in the developing countries are struggling to capture and retain their market share from the multinational companies.
BARGAINING POWER OF BUYERS
?
In case of branded products, there is little that the consumer can influence, but intense competition within the skin care companies results in value for money deals for consumers -(e.g. buy one, get one free concept).
RIVALRY BETWEEN EXISTING FIRMS
?
?
?
?
Competition is faced from both domestic, MNCs and also from cheaper imports, which are increasingly visible in urban markets. Price wars are a common phenomenon. Highly scattered market and poor transport infrastructure limits the ability of MNCs and national players to reach out to remote rural areas and small towns. Low brand awareness enables local players to market their spurious look-alike brands.
PRESSURE FROM SUBSTITUTE PRODUCTS
?
The best part in skincare sector is that the substitutes here are found within the sector itself so if the customers change their consumption pattern then too the effect will be on the company but the whole sector remains unaffected.
CONSUMER PERSPECTIVE
?
With rising education levels and increased brand promotion by the personal care manufacturers, the aspirations of the younger generation have been turning to the branded personal care products. Brand awareness is extremely high in the urban markets but brand loyalty is very low. In rural markets, the opposite is true. Smaller product packs to attract the consumers (those who are open to experiments and those who have lower buying capacity).
?
?
MARKET PLAYER’S PERSPECTIVE
?
?
?
Pricing, brand equity and distribution network are the key differentiating factors in the skin care market. India, being a big country, has different demands from different regions. Price wars are forcing many players to offer discounts and this has reached a stage today where some companies are launching new products with discounts.
MAJOR PLAYERS OF THE SKIN CARE INDUSTRY OF INDIA
MARKET SHARE (%) OF SKIN CARE COMPANIES
(Basis retail value rsp. ’09)
21.8%
3.9%
3.4%
2.5 %
Cavin Care
HUL
53.0%
3.4% 12.0%
Hindustan Unilever Godrej Revlon Others
CavinKare Emami L'Oreal
HINDUSTAN UNILEVER Ltd.
?
Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods Company, with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages. The company?s Turnover is Rs. 17,523 crores (for the financial year 2009 - 2010).
?
Major skin care products are: > Fair and Lovely, Lakme, Pond?s and Vaseline > Breeze, Dove, Hamam, Lifebuoy, Liril, Lux, Rexona and Pears.
?
CAVINKARE LTD.
?
In 1983 with a single product, CavinKare started out as a small partnership firm. The Company that began its journey as Chik India Ltd was renamed as CavinKare Pvt. Ltd (CKPL) in 1998. Smart marketing and clear product positioning not only ensured CavinKare's growth but also helped the company broaden its product portfolio extensively.
?
Major skin care products> Fairever, Fairever Fruit, Spinz Talc, Spinz Deodrants,Hi5 Deodrant and Nyle Cold Cream and Lotion.
?
GODREJ CONSUMER PRODUCTS
Godrej Consumer Products (GCPL) is a leader among India's Fast Moving Consumer Goods companies, with Personal and Home Care Products. ? GCPL is driven by the mission to continuously enhance the quality of life of consumers in highgrowth markets with its products. ? Major skin care products are : > Fair Glow, Cinthol (soaps, deodorants and talcum powder),Vigil & Godrej No.1.
?
EMAMI LIMITED
Emami Limited is a coveted Rs 1000 crore business entity, a leading player in the personal and healthcare consumer products industry in India engaged in manufacturing and marketing of health, beauty and personal care products that are based entirely on ayurvedic formulation. ? Major skin care products of the company are as follows : > Boroplus antiseptic cream, Boroplus prickly heat powder, Fair & Handsome, Malai Kesar Cold Cream & Navratna cool talc.
?
SWOT ANALYSIS
?
?
Strengths 1. Low operational cost. 2. Presence of established distribution network in urban as well as rural areas. 3. Presence of well known brands. Weakness 1. Low exports level. 2. „Me-too? products which legally mimic the labels of established brands narrow down the scope of skin care products in rural & semiurban market.
SWOT ANALYSIS cont.
?
?
Opportunities 1. Untapped rural market. 2. Rising income level of consumers. 3. Large domestic market- 1 billion population 4. Export potential. Threats 1. Removal of import restrictions resulting in replacing of domestic brands. 2. Slowdown in rural demand. 3. Tax & regulatory structure.
CONCLUSION
? ?
?
?
?
Multinational players with international brands have a strong presence in the Indian personal care segment. Local brands too are gaining a foot-holding the market by innovatively developing value offerings to meet the unique needs of the Indian consumer. Going ahead, it will be important to develop R&D capabilities to further customize products for Indian consumers, create greater awareness among the burgeoning middle class and ensure effective distribution reach to service them. The companies that are able to develop a judicious mix of the above will be the eventual winners. The time is ripe to review one?s strategy and come up with innovative approaches to help realize the full potential of the Indian skin care sector.
Thank you!
doc_460523359.ppt